Suburban Housing Resale Prices and Housing Market Restructuring

Abstract

This study shows that in the suburban rings surrounding Cleveland, Ohio average resale prices are sustained through capitalization of quality–price preferences for housing and school quality. Average housing resale prices are highest where local fiscal capacity is built upon a strong residential–nonresidential property tax base and where the total valuation resulting is capitalized into housing stock prices. High total valuation per pupil enables school districts to maintain satisfactory per pupil expenditures that contribute to the sustainability of resale prices. Nonetheless, regional restructuring, population growth, access to superior housing, open space and other amenities in the peripheral, inner– and outer–edge suburban rings are redirecting investment away from the contiguous ring suburbs where the levying of high effective millages is causing total valuations per pupil to fall. Diminishing school district quality and shrinking tax bases in the contiguous suburbs are harbingers of suburban distress and housing disinvestment.